Guide to the Icelandic Krona (with a currency converter!)

History of the Currency of Iceland

Iceland was a territory of Denmark from the 14th century to the 19th century. However, it was only in the 1870s that the Danish krone was introduced in the country after replacing an older Danish currency, the rigsdaler.

Photo from Wikimedia, Creative Commons, by Windrain. No edits made.

At the beginning of the 20th century, Iceland became autonomous from Denmark. As a result, the Icelandic government started issuing the Icelandic krona, making it its official currency.

You can learn more about Denmark and Iceland's story through this complete history of Iceland.

Icelandic Currency Through the Ages

Iceland has been issuing banknotes since 1885. Its first banknotes are the 5, 10, and 50 kronur. However, it was only in the 1920s that Iceland started issuing coins, beginning with the 10 and 25 aurar (now obsolete).

In 1925 and 1926, five more coin denominations were added. These denominations are:

- 1 krona

- 2 krona

- 1 eyrir

- 2 aurar

- 5 aurar 

Photo from Wikimedia, Creative Commons, by Arvedui89. No edits made. 

After the Second World War, in 1946, the Icelandic currency's coins were redesigned to remove the royal monogram of Denmark. 

In 1981, Iceland revalued its currency and added new coins in 5, 10, and 50 aurar denominations. However, in 2003, all coins denominated in the aurar were taken out of circulation. 

Iceland's Currency Crisis in 2008

Iceland is now one of the best places to live in the world. However, did you know it was hit exceptionally hard by the 2008 financial crisis?

In 2008, the world experienced a global financial crisis, significantly affecting many countries, including Iceland.

Three of Iceland's primary banks collapsed, resulting in the country's economic slump. Other factors, such as the banks' inability to finance short-term loans and people simultaneously withdrawing their money due to fear, added to the problem.

Photo from Unsplash, by Evelyn Paris. No edits made. 

In addition, Iceland's currency lost a lot of value against the Euro before eventually collapsing. 

Due to these difficulties, the country got emergency funding from the International Monetary Fund (IMF), and currency trading was restricted.

The changes were able to help the country get back on its feet, and Iceland's currency has remained relatively stable.

Historical Figures Gracing the Icelandic Krona Banknotes

Photo from Flickr, by Tom Jarrett. No edits made. 

Currently, Iceland's currency has five banknotes in circulation. 

If you look closely, you'll notice that each bill features an image of a person. These people are some of Iceland's most famous and prominent historical figures. 

Meanwhile, activities or locations related to the main figure in the banknote are on the other side of each Icelandic krona bill. 

Here are the names and contributions of these historical figures to Iceland. 

Jón Sigurðsson - 500 Krona

Photo from Flickr, by Benjamin Friedman. No edits made. 

Jón Sigurðsson (1811-1879) was one of the leading figures in Iceland's independence movement against Denmark in the 19th century. Iceland's Independence Day is celebrated on his birthday, June 17th, and there's a statue of him facing the Althingi parliament building.

The banknote is color red. 

On one side of the banknote, you'll see Jón Sigurðsson. However, on its back is a usual scene of him writing on his desk, surrounded by books and a tapestry behind him. 

Brynjólfur Sveinsson - 1,000 Krona

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Brynjólfur Sveinsson (1605-1675) was a bishop in the 17th century known for his intelligence and stubbornness. Aside from that, he was a champion of the clergy and advocated the rights of the people involved. In some writings, he's described as a genius debater.

He helped build a cathedral in Skalholt, known as Brynjólfskirkja, which is pictured on the back of the banknote.

The 1,000 krona banknote has a predominantly purple color on a multicolored underprint. 

Jóhannes Kjarval - 2,000 Krona

Photo from Flickr, by James McNally. No edits made. 

Jóhannes Kjarval was a pioneer of Icelandic art in the 20th century and one of the most revered artists in Iceland. He created thousands of artworks, including his interpretation of Iceland's nature. Many of these are displayed at the Kjarvalsstadir art museum. His artworks include styles from various art movements, such as expressionism, abstract, and cubism. 

The 2,000 krona banknote has a blue-violet and yellow print.

At the front is an image of Kjarval and a detail from his "Outside and Inside" painting. Meanwhile, at the back are details from his artworks, "Yearning for Flight" and "Woman and Flowers."

Ragnheiður Jónsdottir - 5,000 Krona

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Ragnheiður Jónsdottir was a beloved 17th-century craftswoman known for her embroidery work. She came from a powerful family and was married to a bishop. In these times, bishops and their families were some of the most influential people in the country.

The 5000 krona denomination is the only currency in Iceland with a woman figure printed on it. 

At the front is Ragnheiður, with her husband and the two of his previous wives. The image is based on a historic painting that is on display at the National Museum of Iceland. Meanwhile, at the back is Ragnheiður, instructing two women on embroidery.

Jónas Hallgrímsson - 10,000 Krona

Photo from Flickr, by Boyko Blagoev. No edits made. 

Jónas Hallgrímsson is one of the most admired poets in Iceland. He's a Romantic poet who helped usher in a new movement in Iceland's poetry scene.

He also helped found the Icelandic magazine Fjölnir, invoking nationalism in the citizens to resist the Danish rule during his time.

The banknote has a predominantly blue color.

At the front is an image of Hallgrimsson. Meanwhile, on the other side is an illustration of a plover bird and his poem, "Skjaldbreidur Mountain."

How Much Does It Cost to Stay in Iceland? 

How expensive is Iceland? The answer is Iceland is a relatively costly place to live in. In fact, according to the World Population Review, as of August 2022, it's listed in the top ten most expensive countries to live in.

Aside from housing, food can be expensive in Iceland because the country greatly relies on imported goods. 

Meanwhile, the estimated cost for foreign visitors can vary between 100 USD and 200 USD per day. The price depends on the type of accommodation, transportation, and meals. 

Photo from Wikimedia, Creative Commons, by Richard Eriksson. No edits made. 

On accommodations, it can cost as low as 35 USD per night or as high as 300 USD per night. Depending on the area and amenities of each accommodation, the price can still go much higher or lower.

Food at an inexpensive restaurant can cost between 18 and 22 USD per meal.

When riding Reykjavik city buses, a single ticket costs around 5 USD, while for those using a rental car, the gas can cost about 2 USD per liter. 

Fortunately, there are many affordable ways to enjoy Iceland. One of the best-kept secrets is Guide to Iceland's VIP Club. As a customer of Guide to Iceland, you can save money at some of the best restaurants, bars, shops, and experiences in the country!

Additionally, you can swim in its hot springs, join affordable sightseeing tours, or independently hunt for the beautiful northern lights in Iceland. 

Tips for Saving Money in Iceland

Iceland can be expensive. However, as a traveler, there are ways to help you save money. Apart from being a part of our VIP club to enjoy some exclusive discounts to make your trip not only unforgettable but also budget-friendly, here are some additional tips to help you save during your adventure.

Book Everything in Advance

If you want to explore, make sure to book everything in advance. This includes renting a car in Iceland, booking a tour, and even booking airport transfers. 

When you book in advance, you have more time to compare different options and get the cheapest offer. Also, the earlier you book, the better deal you'll get from various car rental and travel companies.

You can also check our affordable car rentals in Iceland if you want to start looking for one now. 

Take the Bus When Possible

Car rentals are one of the best ways to travel and reach different parts of Iceland. However, if you're traveling alone, car rentals can be expensive. Fortunately, you can also travel by bus. 

Straeto buses operate across Reykjavik city and the whole Capital Region.

You can pay using your debit or credit card and cash when you board a bus in Reykjavik.

There are also busses that take you directly to your chosen destination. For example, this Blue Lagoon transportation from Keflavik airport allows convenient transfer at an affordable price.

Photo from Wikimedia, Creative Commons, by Raf24. No edits made. 

Stay at a Campsite or a Hostel Instead of a Hotel

There are many hotels in Iceland. However, hotels in Iceland can be expensive and too much if you're trying to budget. 

If you want to stay at a place for a lower cost, check out campsites or hostels in Iceland. These options can help you cut your accommodation expenses by almost half.

Hostels often have a common area, which allows you to make friends on your travels, and a kitchen so you can cook your meals.

Photo from Unsplash, by Pavel Brodsky. No edits made. 

Meanwhile, campsites are a great place to stay if you want to visit Iceland's natural attractions and immerse in them. Aside from being affordable, campsites have their own bathroom, showers, and electricity. Many are even nearby shops and restaurants.

This is a good option if you're renting a campervan or motorhome in Iceland.

Check out our guide to camping in Iceland if you want to learn more about it. 

Always Bring a Refillable Water Bottle

Bring a refillable water bottle or container anywhere you go so you can save money by not buying from the store. 

Photo from Fantastic 2.5 Hour Easy Glacier Hike & Sightseeing Discovery Tour on Solheimajokull.

Whether planning to go on an outing or stay at a paid accommodation, having your own water container can help save you money.

Tap water in Iceland is clean and safe, so refill your water bottle as often as possible.

When outside, for example, on a trekking journey, there are also water sources you can use to refill your water.

Useful Information About Currency in Iceland 

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Knowing the standard practices in Iceland regarding money ensures less hassle on your part and better planning before your trip.

Learn what those practical pieces of information are so that you can apply them during your trip. 

Credit Cards vs. Money

Cash is accepted in Iceland. However, most people who travel to Iceland, and even the locals, prefer to pay through a credit or debit card rather than cash.

Businesses, even with small purchases, accept cards. If you're planning to visit flea markets or farmers markets, however, it's good to have cash.

For credit cards, most businesses in Iceland accept major credit cards such as VISA and MasterCard. Meanwhile, not all businesses accept American Express. For debit cards, many accept Electron and Maestro cards.

Photo from Wikimedia Creative Commons, by Petr Kratochvil. No edits made. 

If you prefer to bring cash, there are ATMs you can use to withdraw money. Fortunately, ATMs are available anywhere in Iceland. 

You can also exchange money from your home country before traveling to Iceland. 

Exchanging Your Currency

The best place to exchange your currency in Iceland is through banks. 

As soon as you land in Iceland at the Keflavik International Airport (KEF), you can change your currency at the bank. 

Photo from Wikimedia Creative Commons, by Antony-22. No edits made. 

If you have a direct transfer to Reykjavik, there're many regular banks you can go to exchange your money, such as Arion Bank, Islandsbanki, and Landsbankinn. 

ATMs in Iceland

Many Automated Teller Machines (ATMs) are available in Iceland, from its big cities to even its smaller villages. However, many of them are situated in the capital city of Reykjavik and at the Keflavik International Airport.

Iceland is generally card-friendly, but bringing a few Icelandic kronurs in your wallet is always wise, especially when visiting the countryside. Moreover, make sure to withdraw money in Reykjavik or at the Keflavik airport. This can help you avoid future hassle and trouble if it's not accessible to get cash in other parts of Iceland. 

About Tipping in Iceland

There is no tipping culture in Iceland, and they're not expected. However, if you want to give tips, you're free to do so.

Tour guides, in particular, appreciate being tipped.

Often, the total amount in many bills already includes service charges. In addition, Iceland's workers make decent wages in most industries. Thus, tipping is not as crucial as in other countries such as the US.

Photo from Flickr, by Viv Lynch. No edits made. 

Shopping Tax-Free

Foreign visitors are entitled to a VAT-free purchase of at least 6,000 ISK for a single receipt when shopping in Iceland.

However, note that this is limited to purchases meant to be taken out of the country. 

To get a tax refund, visitors should get a Tax Refund Cheque at the store counter after purchase. 

Before flying out of Iceland, at the Keflavik International Airport, visitors can cash their cheques in the currency of their choice. 

Photo from Wikimedia Commons, by Ziko van Dijk. No edits made. 

Frequently Asked Questions About Money in Iceland

Here are the answers to some of the commonly asked questions people ask about Iceland's currency.

What's the Best Currency To Bring to Iceland?

It's best to bring the Icelandic krona when you visit Iceland since only a few business establishments accept other currencies.

How Much Money Should You Bring When You Go to Iceland?

The short answer is the less money you bring, the better since most merchants in Iceland use cards. However, if we're talking about how much budget you should have while in Iceland, the answer is around 700 USD to 1,365 USD per person for one week. 

This estimated amount is based on various expenses, including accommodation, food, and gas price, but if will, of course, depend on your itinerary.

Photo from Flickr, by Caden Young. No edits made. 

What Are the Different Ways To Pay in Iceland?

Most establishments in Iceland accept credit and debit cards for payment and cash. 

Aside from those, prepaid cards, such as prepaid Visa cards, Apple Pay, and Google Pay, are also accepted in some establishments in Iceland. 

Photo from Flickr, by Marco Verch. No edits made. 

We hope this article helps shed light on all of your questions about Iceland's currency. In addition, we hope that the tips are enough so you can plan for the best Icelandic vacation. You can also check out our article on the best things to do in Iceland or the top five destinations in Iceland to help you plan. 

Let us know if there are more questions you need to be answered. Don't hesitate to leave your comments and queries below.